Wednesday, August 17, 2011

What I've been trying to say...

From Drovers:

"Looking back another 10 years to 1996, opposite conditions were in place with large cattle numbers and high corn prices due to drought. Calf values were relatively low, but the value of stocker gains was high as feedyards favored heavier cattle. The price slide narrowed, with heavy feeders worth nearly 90 percent that of calves on a per-pound basis."

"This year, Peel says, features an unprecedented combination of low cattle numbers and high corn prices. While calf prices are historically high, so is the value of gain through a backgrounding or stocker phase. In Oklahoma sales the week of July 11, the per-pound price of a 770-pound steer was 97 percent that of a similar 470-pound steer. This implies, Peel says, that cow-calf operators have tremendous flexibility in production and marketing."

What it also "implies" is that the value of grass gain will be significant and grass stocker operators should be able to make some serious money. It's why I have continued to pound the drum that high corn prices are not necessarily bad for cattle ranchers.

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